SlideShare a Scribd company logo
Suppose the three-month interest rate in Europe is 2 percent, but the three-month interest rate in
the United States is 3 percent. The spot rate of dollar is 0.70 euro = $1, but three-month forward
rate is 1 euro= $1.50. Based on this information what can you predict about the foreign exchange
market?

More Related Content

More from EdwardvMiWalshz

(2) 1- What kind of symbiotic relationship is occurring between the tr.pdf
(2) 1- What kind of symbiotic relationship is occurring between the tr.pdf(2) 1- What kind of symbiotic relationship is occurring between the tr.pdf
(2) 1- What kind of symbiotic relationship is occurring between the tr.pdf
EdwardvMiWalshz
 
-37- (Choosing between funds and reporting capital contributions and a.pdf
-37- (Choosing between funds and reporting capital contributions and a.pdf-37- (Choosing between funds and reporting capital contributions and a.pdf
-37- (Choosing between funds and reporting capital contributions and a.pdf
EdwardvMiWalshz
 
--DNA ProbeIn Figure 5- the target DNA used for a genetic study was di.pdf
--DNA ProbeIn Figure 5- the target DNA used for a genetic study was di.pdf--DNA ProbeIn Figure 5- the target DNA used for a genetic study was di.pdf
--DNA ProbeIn Figure 5- the target DNA used for a genetic study was di.pdf
EdwardvMiWalshz
 
- Why use Aseptic technigue in the Microbiology laboratory Yo VIJ - Th.pdf
- Why use Aseptic technigue in the Microbiology laboratory Yo VIJ - Th.pdf- Why use Aseptic technigue in the Microbiology laboratory Yo VIJ - Th.pdf
- Why use Aseptic technigue in the Microbiology laboratory Yo VIJ - Th.pdf
EdwardvMiWalshz
 
- Why vie Aseptic technlaun in the Microbiology Laboratory - What is s.pdf
- Why vie Aseptic technlaun in the Microbiology Laboratory - What is s.pdf- Why vie Aseptic technlaun in the Microbiology Laboratory - What is s.pdf
- Why vie Aseptic technlaun in the Microbiology Laboratory - What is s.pdf
EdwardvMiWalshz
 
- What type of moth pollinates columbines- - Define population- - Illu.pdf
- What type of moth pollinates columbines- - Define population- - Illu.pdf- What type of moth pollinates columbines- - Define population- - Illu.pdf
- What type of moth pollinates columbines- - Define population- - Illu.pdf
EdwardvMiWalshz
 
- A Beautiful Mind - (2001) apply the 5 domains of Schizophrenia and.pdf
- A Beautiful Mind - (2001)  apply the 5 domains of Schizophrenia and.pdf- A Beautiful Mind - (2001)  apply the 5 domains of Schizophrenia and.pdf
- A Beautiful Mind - (2001) apply the 5 domains of Schizophrenia and.pdf
EdwardvMiWalshz
 
- Although antibiotics are not effective against viruses- vaccines are.pdf
- Although antibiotics are not effective against viruses- vaccines are.pdf- Although antibiotics are not effective against viruses- vaccines are.pdf
- Although antibiotics are not effective against viruses- vaccines are.pdf
EdwardvMiWalshz
 
- Should social medial censor content- news- or opinions- - Does the g.pdf
- Should social medial censor content- news- or opinions- - Does the g.pdf- Should social medial censor content- news- or opinions- - Does the g.pdf
- Should social medial censor content- news- or opinions- - Does the g.pdf
EdwardvMiWalshz
 
(a) A(r-1-30) (b) Ar-0-37 (c) rese x+0-x.pdf
(a) A(r-1-30) (b) Ar-0-37 (c) rese x+0-x.pdf(a) A(r-1-30) (b) Ar-0-37 (c) rese x+0-x.pdf
(a) A(r-1-30) (b) Ar-0-37 (c) rese x+0-x.pdf
EdwardvMiWalshz
 
(Waiting Times at a Dentist's Office) Consider a dentist's office wher.pdf
(Waiting Times at a Dentist's Office) Consider a dentist's office wher.pdf(Waiting Times at a Dentist's Office) Consider a dentist's office wher.pdf
(Waiting Times at a Dentist's Office) Consider a dentist's office wher.pdf
EdwardvMiWalshz
 
(Then m isege ara docinul bo sot rexuhd)The median for the given set o.pdf
(Then m isege ara docinul bo sot rexuhd)The median for the given set o.pdf(Then m isege ara docinul bo sot rexuhd)The median for the given set o.pdf
(Then m isege ara docinul bo sot rexuhd)The median for the given set o.pdf
EdwardvMiWalshz
 
(r) The Cytoplent ans Crelivar Orguteifen Wotch a lirtby deggden Drag.pdf
(r) The Cytoplent ans Crelivar Orguteifen Wotch a lirtby deggden Drag.pdf(r) The Cytoplent ans Crelivar Orguteifen Wotch a lirtby deggden Drag.pdf
(r) The Cytoplent ans Crelivar Orguteifen Wotch a lirtby deggden Drag.pdf
EdwardvMiWalshz
 
(e) What are the mean and variane of depth- (Round your variance to tw.pdf
(e) What are the mean and variane of depth- (Round your variance to tw.pdf(e) What are the mean and variane of depth- (Round your variance to tw.pdf
(e) What are the mean and variane of depth- (Round your variance to tw.pdf
EdwardvMiWalshz
 
(h) You want to have $0-7 million saved by the time you reach the age.pdf
(h) You want to have $0-7 million saved by the time you reach the age.pdf(h) You want to have $0-7 million saved by the time you reach the age.pdf
(h) You want to have $0-7 million saved by the time you reach the age.pdf
EdwardvMiWalshz
 
(ii) 1(A)- (in) rint- (i) A(in)- (i+i) istaisi -.pdf
(ii) 1(A)- (in) rint- (i) A(in)- (i+i) istaisi -.pdf(ii) 1(A)- (in) rint- (i) A(in)- (i+i) istaisi -.pdf
(ii) 1(A)- (in) rint- (i) A(in)- (i+i) istaisi -.pdf
EdwardvMiWalshz
 
(Figure- Common Resource Goods 2) In this figure- which point depicts.pdf
(Figure- Common Resource Goods 2) In this figure- which point depicts.pdf(Figure- Common Resource Goods 2) In this figure- which point depicts.pdf
(Figure- Common Resource Goods 2) In this figure- which point depicts.pdf
EdwardvMiWalshz
 
(c) Find an autocovariance of order two for Yt Yt-0+1Yt1+Wt.pdf
(c) Find an autocovariance of order two for Yt Yt-0+1Yt1+Wt.pdf(c) Find an autocovariance of order two for Yt Yt-0+1Yt1+Wt.pdf
(c) Find an autocovariance of order two for Yt Yt-0+1Yt1+Wt.pdf
EdwardvMiWalshz
 
(b) (4 points) Two archers shoot independently at n targets- On each s.pdf
(b) (4 points) Two archers shoot independently at n targets- On each s.pdf(b) (4 points) Two archers shoot independently at n targets- On each s.pdf
(b) (4 points) Two archers shoot independently at n targets- On each s.pdf
EdwardvMiWalshz
 
(b) (4 points) Two archers shoot independently at n targets- On each s (1).pdf
(b) (4 points) Two archers shoot independently at n targets- On each s (1).pdf(b) (4 points) Two archers shoot independently at n targets- On each s (1).pdf
(b) (4 points) Two archers shoot independently at n targets- On each s (1).pdf
EdwardvMiWalshz
 

More from EdwardvMiWalshz (20)

(2) 1- What kind of symbiotic relationship is occurring between the tr.pdf
(2) 1- What kind of symbiotic relationship is occurring between the tr.pdf(2) 1- What kind of symbiotic relationship is occurring between the tr.pdf
(2) 1- What kind of symbiotic relationship is occurring between the tr.pdf
 
-37- (Choosing between funds and reporting capital contributions and a.pdf
-37- (Choosing between funds and reporting capital contributions and a.pdf-37- (Choosing between funds and reporting capital contributions and a.pdf
-37- (Choosing between funds and reporting capital contributions and a.pdf
 
--DNA ProbeIn Figure 5- the target DNA used for a genetic study was di.pdf
--DNA ProbeIn Figure 5- the target DNA used for a genetic study was di.pdf--DNA ProbeIn Figure 5- the target DNA used for a genetic study was di.pdf
--DNA ProbeIn Figure 5- the target DNA used for a genetic study was di.pdf
 
- Why use Aseptic technigue in the Microbiology laboratory Yo VIJ - Th.pdf
- Why use Aseptic technigue in the Microbiology laboratory Yo VIJ - Th.pdf- Why use Aseptic technigue in the Microbiology laboratory Yo VIJ - Th.pdf
- Why use Aseptic technigue in the Microbiology laboratory Yo VIJ - Th.pdf
 
- Why vie Aseptic technlaun in the Microbiology Laboratory - What is s.pdf
- Why vie Aseptic technlaun in the Microbiology Laboratory - What is s.pdf- Why vie Aseptic technlaun in the Microbiology Laboratory - What is s.pdf
- Why vie Aseptic technlaun in the Microbiology Laboratory - What is s.pdf
 
- What type of moth pollinates columbines- - Define population- - Illu.pdf
- What type of moth pollinates columbines- - Define population- - Illu.pdf- What type of moth pollinates columbines- - Define population- - Illu.pdf
- What type of moth pollinates columbines- - Define population- - Illu.pdf
 
- A Beautiful Mind - (2001) apply the 5 domains of Schizophrenia and.pdf
- A Beautiful Mind - (2001)  apply the 5 domains of Schizophrenia and.pdf- A Beautiful Mind - (2001)  apply the 5 domains of Schizophrenia and.pdf
- A Beautiful Mind - (2001) apply the 5 domains of Schizophrenia and.pdf
 
- Although antibiotics are not effective against viruses- vaccines are.pdf
- Although antibiotics are not effective against viruses- vaccines are.pdf- Although antibiotics are not effective against viruses- vaccines are.pdf
- Although antibiotics are not effective against viruses- vaccines are.pdf
 
- Should social medial censor content- news- or opinions- - Does the g.pdf
- Should social medial censor content- news- or opinions- - Does the g.pdf- Should social medial censor content- news- or opinions- - Does the g.pdf
- Should social medial censor content- news- or opinions- - Does the g.pdf
 
(a) A(r-1-30) (b) Ar-0-37 (c) rese x+0-x.pdf
(a) A(r-1-30) (b) Ar-0-37 (c) rese x+0-x.pdf(a) A(r-1-30) (b) Ar-0-37 (c) rese x+0-x.pdf
(a) A(r-1-30) (b) Ar-0-37 (c) rese x+0-x.pdf
 
(Waiting Times at a Dentist's Office) Consider a dentist's office wher.pdf
(Waiting Times at a Dentist's Office) Consider a dentist's office wher.pdf(Waiting Times at a Dentist's Office) Consider a dentist's office wher.pdf
(Waiting Times at a Dentist's Office) Consider a dentist's office wher.pdf
 
(Then m isege ara docinul bo sot rexuhd)The median for the given set o.pdf
(Then m isege ara docinul bo sot rexuhd)The median for the given set o.pdf(Then m isege ara docinul bo sot rexuhd)The median for the given set o.pdf
(Then m isege ara docinul bo sot rexuhd)The median for the given set o.pdf
 
(r) The Cytoplent ans Crelivar Orguteifen Wotch a lirtby deggden Drag.pdf
(r) The Cytoplent ans Crelivar Orguteifen Wotch a lirtby deggden Drag.pdf(r) The Cytoplent ans Crelivar Orguteifen Wotch a lirtby deggden Drag.pdf
(r) The Cytoplent ans Crelivar Orguteifen Wotch a lirtby deggden Drag.pdf
 
(e) What are the mean and variane of depth- (Round your variance to tw.pdf
(e) What are the mean and variane of depth- (Round your variance to tw.pdf(e) What are the mean and variane of depth- (Round your variance to tw.pdf
(e) What are the mean and variane of depth- (Round your variance to tw.pdf
 
(h) You want to have $0-7 million saved by the time you reach the age.pdf
(h) You want to have $0-7 million saved by the time you reach the age.pdf(h) You want to have $0-7 million saved by the time you reach the age.pdf
(h) You want to have $0-7 million saved by the time you reach the age.pdf
 
(ii) 1(A)- (in) rint- (i) A(in)- (i+i) istaisi -.pdf
(ii) 1(A)- (in) rint- (i) A(in)- (i+i) istaisi -.pdf(ii) 1(A)- (in) rint- (i) A(in)- (i+i) istaisi -.pdf
(ii) 1(A)- (in) rint- (i) A(in)- (i+i) istaisi -.pdf
 
(Figure- Common Resource Goods 2) In this figure- which point depicts.pdf
(Figure- Common Resource Goods 2) In this figure- which point depicts.pdf(Figure- Common Resource Goods 2) In this figure- which point depicts.pdf
(Figure- Common Resource Goods 2) In this figure- which point depicts.pdf
 
(c) Find an autocovariance of order two for Yt Yt-0+1Yt1+Wt.pdf
(c) Find an autocovariance of order two for Yt Yt-0+1Yt1+Wt.pdf(c) Find an autocovariance of order two for Yt Yt-0+1Yt1+Wt.pdf
(c) Find an autocovariance of order two for Yt Yt-0+1Yt1+Wt.pdf
 
(b) (4 points) Two archers shoot independently at n targets- On each s.pdf
(b) (4 points) Two archers shoot independently at n targets- On each s.pdf(b) (4 points) Two archers shoot independently at n targets- On each s.pdf
(b) (4 points) Two archers shoot independently at n targets- On each s.pdf
 
(b) (4 points) Two archers shoot independently at n targets- On each s (1).pdf
(b) (4 points) Two archers shoot independently at n targets- On each s (1).pdf(b) (4 points) Two archers shoot independently at n targets- On each s (1).pdf
(b) (4 points) Two archers shoot independently at n targets- On each s (1).pdf
 

Recently uploaded

How libraries can support authors with open access requirements for UKRI fund...
How libraries can support authors with open access requirements for UKRI fund...How libraries can support authors with open access requirements for UKRI fund...
How libraries can support authors with open access requirements for UKRI fund...
Jisc
 
Thesis Statement for students diagnonsed withADHD.ppt
Thesis Statement for students diagnonsed withADHD.pptThesis Statement for students diagnonsed withADHD.ppt
Thesis Statement for students diagnonsed withADHD.ppt
EverAndrsGuerraGuerr
 
The Art Pastor's Guide to Sabbath | Steve Thomason
The Art Pastor's Guide to Sabbath | Steve ThomasonThe Art Pastor's Guide to Sabbath | Steve Thomason
The Art Pastor's Guide to Sabbath | Steve Thomason
Steve Thomason
 
The approach at University of Liverpool.pptx
The approach at University of Liverpool.pptxThe approach at University of Liverpool.pptx
The approach at University of Liverpool.pptx
Jisc
 
2024.06.01 Introducing a competency framework for languag learning materials ...
2024.06.01 Introducing a competency framework for languag learning materials ...2024.06.01 Introducing a competency framework for languag learning materials ...
2024.06.01 Introducing a competency framework for languag learning materials ...
Sandy Millin
 
Unit 8 - Information and Communication Technology (Paper I).pdf
Unit 8 - Information and Communication Technology (Paper I).pdfUnit 8 - Information and Communication Technology (Paper I).pdf
Unit 8 - Information and Communication Technology (Paper I).pdf
Thiyagu K
 
Ethnobotany and Ethnopharmacology ......
Ethnobotany and Ethnopharmacology ......Ethnobotany and Ethnopharmacology ......
Ethnobotany and Ethnopharmacology ......
Ashokrao Mane college of Pharmacy Peth-Vadgaon
 
TESDA TM1 REVIEWER FOR NATIONAL ASSESSMENT WRITTEN AND ORAL QUESTIONS WITH A...
TESDA TM1 REVIEWER  FOR NATIONAL ASSESSMENT WRITTEN AND ORAL QUESTIONS WITH A...TESDA TM1 REVIEWER  FOR NATIONAL ASSESSMENT WRITTEN AND ORAL QUESTIONS WITH A...
TESDA TM1 REVIEWER FOR NATIONAL ASSESSMENT WRITTEN AND ORAL QUESTIONS WITH A...
EugeneSaldivar
 
Introduction to Quality Improvement Essentials
Introduction to Quality Improvement EssentialsIntroduction to Quality Improvement Essentials
Introduction to Quality Improvement Essentials
Excellence Foundation for South Sudan
 
Supporting (UKRI) OA monographs at Salford.pptx
Supporting (UKRI) OA monographs at Salford.pptxSupporting (UKRI) OA monographs at Salford.pptx
Supporting (UKRI) OA monographs at Salford.pptx
Jisc
 
The geography of Taylor Swift - some ideas
The geography of Taylor Swift - some ideasThe geography of Taylor Swift - some ideas
The geography of Taylor Swift - some ideas
GeoBlogs
 
Operation Blue Star - Saka Neela Tara
Operation Blue Star   -  Saka Neela TaraOperation Blue Star   -  Saka Neela Tara
Operation Blue Star - Saka Neela Tara
Balvir Singh
 
Language Across the Curriculm LAC B.Ed.
Language Across the  Curriculm LAC B.Ed.Language Across the  Curriculm LAC B.Ed.
Language Across the Curriculm LAC B.Ed.
Atul Kumar Singh
 
The French Revolution Class 9 Study Material pdf free download
The French Revolution Class 9 Study Material pdf free downloadThe French Revolution Class 9 Study Material pdf free download
The French Revolution Class 9 Study Material pdf free download
Vivekanand Anglo Vedic Academy
 
PART A. Introduction to Costumer Service
PART A. Introduction to Costumer ServicePART A. Introduction to Costumer Service
PART A. Introduction to Costumer Service
PedroFerreira53928
 
How to Split Bills in the Odoo 17 POS Module
How to Split Bills in the Odoo 17 POS ModuleHow to Split Bills in the Odoo 17 POS Module
How to Split Bills in the Odoo 17 POS Module
Celine George
 
GIÁO ÁN DẠY THÊM (KẾ HOẠCH BÀI BUỔI 2) - TIẾNG ANH 8 GLOBAL SUCCESS (2 CỘT) N...
GIÁO ÁN DẠY THÊM (KẾ HOẠCH BÀI BUỔI 2) - TIẾNG ANH 8 GLOBAL SUCCESS (2 CỘT) N...GIÁO ÁN DẠY THÊM (KẾ HOẠCH BÀI BUỔI 2) - TIẾNG ANH 8 GLOBAL SUCCESS (2 CỘT) N...
GIÁO ÁN DẠY THÊM (KẾ HOẠCH BÀI BUỔI 2) - TIẾNG ANH 8 GLOBAL SUCCESS (2 CỘT) N...
Nguyen Thanh Tu Collection
 
Sectors of the Indian Economy - Class 10 Study Notes pdf
Sectors of the Indian Economy - Class 10 Study Notes pdfSectors of the Indian Economy - Class 10 Study Notes pdf
Sectors of the Indian Economy - Class 10 Study Notes pdf
Vivekanand Anglo Vedic Academy
 
Chapter 3 - Islamic Banking Products and Services.pptx
Chapter 3 - Islamic Banking Products and Services.pptxChapter 3 - Islamic Banking Products and Services.pptx
Chapter 3 - Islamic Banking Products and Services.pptx
Mohd Adib Abd Muin, Senior Lecturer at Universiti Utara Malaysia
 
Palestine last event orientationfvgnh .pptx
Palestine last event orientationfvgnh .pptxPalestine last event orientationfvgnh .pptx
Palestine last event orientationfvgnh .pptx
RaedMohamed3
 

Recently uploaded (20)

How libraries can support authors with open access requirements for UKRI fund...
How libraries can support authors with open access requirements for UKRI fund...How libraries can support authors with open access requirements for UKRI fund...
How libraries can support authors with open access requirements for UKRI fund...
 
Thesis Statement for students diagnonsed withADHD.ppt
Thesis Statement for students diagnonsed withADHD.pptThesis Statement for students diagnonsed withADHD.ppt
Thesis Statement for students diagnonsed withADHD.ppt
 
The Art Pastor's Guide to Sabbath | Steve Thomason
The Art Pastor's Guide to Sabbath | Steve ThomasonThe Art Pastor's Guide to Sabbath | Steve Thomason
The Art Pastor's Guide to Sabbath | Steve Thomason
 
The approach at University of Liverpool.pptx
The approach at University of Liverpool.pptxThe approach at University of Liverpool.pptx
The approach at University of Liverpool.pptx
 
2024.06.01 Introducing a competency framework for languag learning materials ...
2024.06.01 Introducing a competency framework for languag learning materials ...2024.06.01 Introducing a competency framework for languag learning materials ...
2024.06.01 Introducing a competency framework for languag learning materials ...
 
Unit 8 - Information and Communication Technology (Paper I).pdf
Unit 8 - Information and Communication Technology (Paper I).pdfUnit 8 - Information and Communication Technology (Paper I).pdf
Unit 8 - Information and Communication Technology (Paper I).pdf
 
Ethnobotany and Ethnopharmacology ......
Ethnobotany and Ethnopharmacology ......Ethnobotany and Ethnopharmacology ......
Ethnobotany and Ethnopharmacology ......
 
TESDA TM1 REVIEWER FOR NATIONAL ASSESSMENT WRITTEN AND ORAL QUESTIONS WITH A...
TESDA TM1 REVIEWER  FOR NATIONAL ASSESSMENT WRITTEN AND ORAL QUESTIONS WITH A...TESDA TM1 REVIEWER  FOR NATIONAL ASSESSMENT WRITTEN AND ORAL QUESTIONS WITH A...
TESDA TM1 REVIEWER FOR NATIONAL ASSESSMENT WRITTEN AND ORAL QUESTIONS WITH A...
 
Introduction to Quality Improvement Essentials
Introduction to Quality Improvement EssentialsIntroduction to Quality Improvement Essentials
Introduction to Quality Improvement Essentials
 
Supporting (UKRI) OA monographs at Salford.pptx
Supporting (UKRI) OA monographs at Salford.pptxSupporting (UKRI) OA monographs at Salford.pptx
Supporting (UKRI) OA monographs at Salford.pptx
 
The geography of Taylor Swift - some ideas
The geography of Taylor Swift - some ideasThe geography of Taylor Swift - some ideas
The geography of Taylor Swift - some ideas
 
Operation Blue Star - Saka Neela Tara
Operation Blue Star   -  Saka Neela TaraOperation Blue Star   -  Saka Neela Tara
Operation Blue Star - Saka Neela Tara
 
Language Across the Curriculm LAC B.Ed.
Language Across the  Curriculm LAC B.Ed.Language Across the  Curriculm LAC B.Ed.
Language Across the Curriculm LAC B.Ed.
 
The French Revolution Class 9 Study Material pdf free download
The French Revolution Class 9 Study Material pdf free downloadThe French Revolution Class 9 Study Material pdf free download
The French Revolution Class 9 Study Material pdf free download
 
PART A. Introduction to Costumer Service
PART A. Introduction to Costumer ServicePART A. Introduction to Costumer Service
PART A. Introduction to Costumer Service
 
How to Split Bills in the Odoo 17 POS Module
How to Split Bills in the Odoo 17 POS ModuleHow to Split Bills in the Odoo 17 POS Module
How to Split Bills in the Odoo 17 POS Module
 
GIÁO ÁN DẠY THÊM (KẾ HOẠCH BÀI BUỔI 2) - TIẾNG ANH 8 GLOBAL SUCCESS (2 CỘT) N...
GIÁO ÁN DẠY THÊM (KẾ HOẠCH BÀI BUỔI 2) - TIẾNG ANH 8 GLOBAL SUCCESS (2 CỘT) N...GIÁO ÁN DẠY THÊM (KẾ HOẠCH BÀI BUỔI 2) - TIẾNG ANH 8 GLOBAL SUCCESS (2 CỘT) N...
GIÁO ÁN DẠY THÊM (KẾ HOẠCH BÀI BUỔI 2) - TIẾNG ANH 8 GLOBAL SUCCESS (2 CỘT) N...
 
Sectors of the Indian Economy - Class 10 Study Notes pdf
Sectors of the Indian Economy - Class 10 Study Notes pdfSectors of the Indian Economy - Class 10 Study Notes pdf
Sectors of the Indian Economy - Class 10 Study Notes pdf
 
Chapter 3 - Islamic Banking Products and Services.pptx
Chapter 3 - Islamic Banking Products and Services.pptxChapter 3 - Islamic Banking Products and Services.pptx
Chapter 3 - Islamic Banking Products and Services.pptx
 
Palestine last event orientationfvgnh .pptx
Palestine last event orientationfvgnh .pptxPalestine last event orientationfvgnh .pptx
Palestine last event orientationfvgnh .pptx
 

Suppose the three-month interest rate in Europe is 2 percent- but the.pdf

  • 1. Suppose the three-month interest rate in Europe is 2 percent, but the three-month interest rate in the United States is 3 percent. The spot rate of dollar is 0.70 euro = $1, but three-month forward rate is 1 euro= $1.50. Based on this information what can you predict about the foreign exchange market?